(Repeat to remove extraneous text)
* FTSEurofirst 300 higher after closing flat on Wed
* Food and beverages sector down, Unilever falls on results
* Barclays slips on lingering economic uncertainty
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Aug 5 (Reuters) - European shares drifted higher in
morning trade on Thursday ahead of fresh interest rate decisions
from the European Central Bank and the Bank of England, with
investors staying cautious before Friday's key U.S. jobs data.
At 0851 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.4 percent 1,074.74 points. The index
ended little changed on Wednesday.
The Bank of England and the European Central Bank hold
meetings later on Thursday, although no policy changes are
expected. The focus of the post-rate decision news conference
will be whether the ECB sees the euro-zone economy maintaining
its recent blistering form. []
Among financials, KBC <KBC.BR> jumped 4.1 percent after the
Belgian bank beat expectations with growth in second-quarter
profit before one-offs, led by lower costs and reduced bad debt
provisions. []
"Corporate earnings will keep helping the market for some
more time, but if macro-economic numbers are going to take over,
then good earnings will not be enough to support the market,"
said Koen De Leus, economist at KBC Securities.
"Nervousness is now about the U.S. jobs data as expectations
of the markets are really linked to these numbers. If they are
better than expected, then concerns of a double dip will fade
very fast. If that's not happening, then we might see a
correction."
The U.S. Labor Department report is expected to show on
Friday non-farm payrolls fell by 65,000 in July after declining
by 125,000 in June as temporary workers hired to conduct the
country's decennial census were dismissed.
Elsewhere in the financials sector, Barclays <BARC.L> fell 3
percent even after lower bad debts propelled it to higher than
expected profits, as investors focused on its investment banking
performance, rising costs and Spanish bad debts.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on banks' bad debt provisions, click here:
http://r.reuters.com/rug33n
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"Given the high dependence on investment banking activities,
Barclays is vulnerable to a slowdown in volumes and/or further
deterioration in the economic environment which could result in
higher writedowns," J.P. Morgan Cazenove said in a note.
"Barclays is also exposed to the economic cycle through its
lending exposure in particular to the UK credit cycle, South
Africa and Spain. Being a retail bank it is also exposed to the
interest rate environment."
Among individual movers, consumer goods giant Unilever
<ULVR.L> fell 1.6 percent, warning of increased competition and
higher commodity costs after lagging forecasts with a 3.6
percent rise in second-quarter sales.
Elsewhere, Zurich Financial Services <ZURN.VX>, Europe's
fourth-largest insurer, fell 2.8 percent after first-half
profits fell 10 percent on high catastrophe payouts and
provisions to shield against loan losses in the UK and Ireland.
The Euro STOXX 50 <>, the euro zone's blue-chip
index, was up 0.5 percent to 2,837.86 points. It hovered just
above its 200-day moving average and the 61.8 percent Fibonacci
retracement of the index's fall from an April high to a May low,
generally a positive signal.
(Editing by Simon Jessop)
